from nbc news in washington, the world's longest running television program, this is "meet the press" with david gregory. >> good sunday morning. congress returns to work. barring a last-minute deal $85 billion in cuts will be hitting the board slashing military programs and cutting long-term unemployment benefits as well. all told, more than a million federal workers could be affected. >> these cuts are not smart. they are not fair. they will hurt our economy. they will add hundreds of thousands of americans to the unemployment roles. this is not an exaggeration.

they will lose jobs. >> the sequester blame game has started. live with us secretary of transportation ray lahood who sound add pretty loud alarm bell on friday. mr. secretary, good morning. good to have you here. >> good morning. >> you talked friday about a calamity in our air service system in america, a billion dollars in cuts that have to be made at the department of transportation, $600 million from the faa, 47,000 faa employees will need to be furloughed at least one day per pay period. is it still going to be safe for the american public to fly if this sequester goes forward. >> one thing we never compromise on is safety. we will never take a back seat to safety. safety will not be compromised. but we will have twork with the airlines in slowing planes down. but there will be enough controllers to make sure planes are guided in and out of airports safely. >> this is about aggravation, not about safety. >> look, this is a huge cut.

it's a billion dollars. $600 million at faa, which has the largest number of employees at d.o.t. it's about shared sacrifice. this doesn't have to happened, david. if republicans and democrats get together this week and look at the president's plan he put on the table to save $85 billion, this does not have to happen. there's still time for a compromise. >> realistically do you see a compromise being reached by the end. week? >> i hope so. i do. it was done before. it was done at the 11th hour to save us from going into the fiscal cliff. it can be done again and it can be done by friday. >> so by march 1st, does the traveling public experience, what, immediate disruptions in the flying skies? >> we will begin to look at every contract at faa. we will look at our opportunities to do what we have to do to come up with a billion dollars, and $600 million at

faa. these things will begin to be phased in. >> the other point to pin you down on, frankly, is security. not just lines at the airport but safety when it comes to protecting the traveling public. can you give us your assurances about that. >> tfa and security lines are under janet napolitano at the department of homeland security. i will say this. we will never compromise on safety. people are going to be safe flying. >> here is the reality. this is 2% of your budget. a billion dollars is a lot of money to anybody, right. but relative to the federal budget, it's relatively small. why, instead of worrying about dire consequences aren't you and your managers coming up with the best way to make these cuts that protect essential services. >> we are going to protect essential services and we're going to look at all of our contracts. we're going to look at all nonpersonnel items that we can. in the end, the largest amount of money is in the personnel area and our controllers

represent 15,000 of the 47,000 people at faa. the point is that the sequester doesn't allow us to move money around. that's the difference here. if we could shift money around, certainly we would do that. these are very tough decisions. but they have to be made. but it can all be brought to a halt when the congress comes back this week and republicans and democrats do what they have been able to do in the past, talk to one another, work with one another, compromise with the president who has put a plan on the table. >> republicans, your former colleagues, former republican member of congress are saying, wait a minute, mr. secretary, this is a bit overblown. this is a transportation committee putting out a statement that reads in part, the following, "we're disappointed by the administration creating alarm about sequestration's impact on aviation, prematurely outlining potential impacts before identifying other savings is not helpful. today's exaggerations are not backed up by any real financial

data. the agencies is well positioned to absorb spending reductions without compromising the safety or efficiency of the national airspace system. they go on to point out faa has received significant funding increases over the last ten years the annual budget has increased $3 billion or 41%. do you really think americans think government can't tighten up a bit, even if it's a clumsy way of doing it with the sequester. >> look, this is not your father's faa. this is faa that has to meet certain contract obligations with our controllers. we know that air travel is back at a par prior to 91/11. we know a lot of people are flying. we're not making this up, david. we're not making this up in order to put pain on the american people. we are required to cut a billion dollars, and we're going to do that unless congress gets together and works together and compromises on this issue. >> all right. so you talked about being an

illinois guy. you talked about lincoln this week as you issued a challenge to republican. here is what you said? >> i suggest that my former colleagues on the republican side go see the movie "lincoln." because in the movie "lincoln" it shows how hard it was back then to get things done. but what lincoln did is he gathered people around him the way i believe president obama is doing by calling republicans, talking to them, trying to work with them. when that happens, big things get solved. >> mr. secretary, the president is not exactly rallying republicans and democrats together. what he's doing, and you're part of this, is waging a public relations war, going right to the public and saying, look, public opinion is on my side. these republicans are to blame for not getting anything done here. to be fair to the president, john boehner said he's not going to negotiate with the president either. there can be a little lincoln on

either side here. >> i say go watch the lingds ling movie. i predict it's going to be the best picture tonight. i know you don't want my prediction, save that for later. look, the president has put a plan on the table to save the $85 billion. the president has made phone calls to the republican leaders -- the idea the president hasn't reached out is just not true, not factual. he's reached out. he's talked to republican leaders. he's put a plan on the table. now it's the congress's opportunity this week, as they come back from listening to their constituents about all the hurt that's going to be taking place in the country as a result of this sequester. i believe these members of congress will push their leaders to say let's fix this before friday. >> fair enough. as the chief executive, does the president have a unique responsibility to do something to break this impasse even if he feels he's absolutely right and doesn't have a good negotiating

partner? >> he's done that. he's made phone calls to republican leaders. he's put a plan on the table and he's ready, willing, and able to do what he can come work with people. >> isn't it realistic to say there's not going to be meaningful debt reduction this year under these circumstances? >> look, everybody is in favor of debt reduction. everybody is in favor of getting us to the point where we're really making progress. i think it will happen. i really do. >> you think it will happen? >> i'm optimistic about this. >> all right. mr. secretary, thank you very much. >> thank you, david. >> and coming up later in the program our political round az table. analysis from the fallout from the sequester debate and how it can affect the economy and markets. first the nation's governors are meeting this weekend here in washington. we have 2011 them meeting here this morning for a debate. the chairman of the republican governors association, louisiana's bobby jindal and democratic governor of massachusetts, deval patrick. how are the states taking on the big issues that washington is

debating? from the budget to gun roll, health care and abortion. governor jindal, governor patrick, welcome back back to "meet the press." >> thank you. >> look, this is immediate impact, governor jindal, here is the front page of the newspaper from lake charles, louisiana, your home state just yesterday showing air traffic control on the funding block with this sequestration. you heard the secretary say this is real disruption because they have to cut a billion dollars. >> the president, you heard right, compared the president to lincoln. we need real leadership here. the president has to stand up to the plight. if he really thinks this will devastate the military, air traffic control, really devastate meat inspection, they rolled out great political theater, cutting 3% of the budget can cause all these consequences, here is a chance to say here is how we can do it better. the reality is the federal budget even after the cuts will be larger than last year's budget. bob woodward has a great piece

where he -- he doesn't use these words, basically says the president has amnesia. he proposes sequester, signed it into law and doesn't want to make the cuts. the reality is he doesn't need these exact cuts but we can cut 3% without hollowing out military, meat inspections. >> you're saying the folks in your state who are reading that headline, they can solve this? >> absolutely. governors solve this. families, businesses have had to tighten their belts and do more than less. we're talking less than 3%. we're talking about a federal budget that's still going to grow. let's be clear about this, only in washington, d.c. is that a cut. you ask any american is there at least 3% of the federal budget wasted today. in the department of transportation, members of congress point out hundreds of millions of dollars on consulting contracts, on travel. let's not cut the air traffic controllers first, let's cut the waste. one thing ray said i do agree with, let's give them the ability to shift those dollars, give them real priorities, make

smart spending cuts. don't do it with an axe but a skap scalpel. the president needs to step up and say here is how you cut $85 million. i have an idea for them. >> he has said it. congress doesn't want to -- >> delay health care exchanges so they can work with states on waivers, flexibility. you can save tens of billions of dollars there and you're not cutting a program that's started yet, just delay -- >> governor patrick, i'm looking at our sheet here. more than 60,000 cuts with the department of defense and non-department of defense in your state alone, job losses because of sequestration. >> this is about growth, always about growth from the president's perspective and ought to be about growth from the american people's perspective and all of our point of view. government has a role to play in that. the president understands that. i've listened to my good friend here, governor jindal, who has talked about these issues as if they are budget issues alone. they have actually seen some $2.5 trillion in budget cuts

from this president. and the only plan on the table right now to avoid sequester is the president's plan. this notion about not having leadership, this is about leadership. the president has shown that a balanced approach, which is about cuts and closing loopholes, that enables us to invest in things that grow jobs is more important and appropriate. >> look at the polling, governor jindal. the white house point is the president campaigned on his theory of the case for economic growth, for fiscal balance. it included more revenues, some of which came as a result of the fiscal cliff fight. now he's talking about closing additional loopholes. john boehner himself, the speaker of the house, said this would hurt national security to let the sequester go forward. why not agree to additional revenues for cuts. >> we're agreeing to government economy. the greed of washington, d.c. there's never enough revenue,

never enough taxes for this administrati administration. i agree with my friend, we should be about growing private economy. nobody is saying we should do the cuts this way. in 2011 this president campaigned on a commitment he made. he made it to congress, signed into law saying he didn't want to have the deficit fight, the budget fight in 2012 when he was campaigning. so he said, in exchange for that raising the ceiling, he proposed he signed in this law, this $85 billion cut. he already has over $600 billion in new revenues. he's already had over $600 billion in increased spending. we are for a balanced approach. we've had more than enough revenues, more than enough growth in government spending. now is the time to start shrinking our spending so we can grow private sector economy, not the government. >> first of all, this isn't about whether there are or are not cuts. the president's plan has cuts. to some extent deeper cuts than the sequester provides. it also has the closing of loopholes, some of the same loopholes speaker boehner

favored only a little while ago. what we've seen is more of the same, the congressional governors move the guam post as soon as the government comes their way. he has a plan on the table that has an awful lot of things they say they support. put it to a vote. with democrats and moderate republicans it will pass and it will be good for the economy. >> there's a broader question here about leaders executives. how tough in a second term? how are those challenges different as you move forward and have more experience behind you, governor? >> my recommendation to the president is it's time to stop campaigning, time to do the job in d.c. in my state we passed one of the most sweeping reform laws in the country giving real choice to our kids, putting great teachers in the classroom, tenure laws. putting dollars in the classroom, significant tax reform. we have different ideas. we're trying to get rid of the income tax in louisiana. my advice to the president. stop the campaigning, stop

sending out your cabinet secretaries to scare the american people. roll up your sleeves and do governoring. i'm lower loopholes. let's grow tax rates for the economy so we put more money in the private sector, walmart is saying thanks for tax increases, seeing business slow down. we don't need more taxes, we need private, not public growth. >> peggy noonon in her column said with the president it's always government by freakout. does she have a point about that? cliffs, always by freakout, that's what's happening with sequester, 700,000 children dropped from head start, meat won't be inspected, tsa workers laid off. mr. obama hit on his own version of national unity, everyone gets scared together. >> no one turns a phrase like peggy noonan. look, this is not of the president's creation.

you know this president didn't campaign and hasn't wanted to govern by constantly being in conflict with congressional republicans. but from the very beginning, remember, it was a leadership of the republicans and senate who say their number one agenda was to make this president a one-term president. having won a second term, their number one agenda is to slow down the recovery of our economy. that needs to be called out. it is a fact that sequester is going to have an impact, particularly on education in our state and i think also in louisiana. it's going to have an impact on innovation investments. it's going to have an impact on infrastructure investments. those three things have been responsible for growing our massachusetts faster than growth rate, coming out of recession faster than other states. it's a winning formula for the nation. we can't slow that down. >> one thing for the record, i think the white house stipulates it was the president's idea sequester, 174 agreeing to it.

let me move on to a couple of other areas. big issues states are debating, of course, washington is debating. i want to start on the issue of obama care. governor jindal, you seem to be bucking the trend among republicans. a lot of republican governors are saying we're going to go with what the president wants, expands medicaid rules, which is our option under the medicaid plan. we'll have to pay money but the federal government will pay more of it. you're saying, no, i'm not going to do that. other republicans are saying yes, you should. what do you know they don't know. >> one thing, every governor has to make the decision best know their state. it will cost louisiana taxpayers over a billion dollars in the next years. the president said doesn't make sense to put more people in the medicaid program without reforming the program. he was right in 2009. we have offered multiple times to meet with the president. we've offered to give flexibility on eligibility,

benefit design, premium assistance, not a one size fits all approach. in louisiana alone, as many as 180,000 people would be moved from private insurance to medicaid under this expansion. that doesn't make sense. not effective outcomes, not efficient program. we've offered to meet with the president. he's yet to respond us. there's opportunities on a bipartisan basis to reform for those governors responding as well as those governors not expanding. i do believe everybody in america has access to affordable hillary clinton. i agree with what the president said in 2009. doesn't make sense to put more people without expanding it, reforming it. >> governor? >> national health care is based on our own experiment in massachusetts. it's been wildly successful. over 90% of our residents have access to medicare, 99.3% of children, i think it is, of children. i don't think any other state in america can touch that. there are more businesses offering insurance to their employees today than before health care reform went into effect. it has not broken our budget and

it's very, very popular. we have found a tremendous amount of flexibility with this administration and actually with the bush administration before them in implementing this. i understand that there are philosophical reasons for not supporting this president's solution. but rather than having the usual choices, which was between a perfect solution and no solution, we tried something in this country. i congratulate the president. >> gun control, looks like there may be some movement towards universal background checks. you see new york and connecticut kind of pursuing their own approach. are states going to go about this differently or are a lot of states, particularly with more pro gun rights supporters, not going to do anything and let washington have its own battle. >> we proposed legislation in louisiana, i proposed legislation. i think there's an opportunity to do something here. if we're serious about doing something and not just had a political football. we can work with democrats, the administration and say i think we all agree we shouldn't have

guns in the hands of those with serious mental illness. we propose legislation provide more information, into the background system. let's fix the background system. there are some things -- if the president wants to get something done, that's what we can do. if there are areas of agreement. if he wants political football -- >> are you going to have a patchwork of laws? >> i hope not. i think we can agree on a more rigorous background check system. in fact, we can have as rigorous a set of laws in our home state as possible but if you can buy guns in bulk over the state line and walk them in, it doesn't help. some solutions have to be national in nature. >> tax debate interesting. here are headlines that capture different approaches you have in your respective states. boston globe patrick would hike one tax cut, another seeks to raise $2 billion on levies on income while lowering sales. "times-picayune" headline, governor jindal calls for elimination of all corporate

taxes, sales tax which critics say could hurt a lot more average louisianans. doesn't it come down to in some ways, where would you rather live? >> we were just talking about that. >> lots of reasons to debate. here are some statistics state to state, massachusetts to louisiana that reflect kind of more services, less taxes and different results. let's put that up there. you have a bigger population in massachusetts. you see that there. high school graduation rate much higher in massachusetts. median income about 20,000 higher, percentage of population without health care insurance much higher. louisiana the percentage of population on food stamps much higher in louisiana. do results break a little along ideological and philosophical lines about taxes and amount of government services? >> david, i would say look how far louisiana has come. we're a top ten state when it comes to private sector job creation, unemployment 5% lower than massachusetts. in louisiana we're actually -- our per capita income, average

per capita has risen despite the national recession, highest ranking in 80 years. children's insurance rate, 90% have insurance. look at charter schools in new orleans, doubling on grade reading level after 25 years. after 25 years of losing people, we have had more people move into the state than leaving the state. one of the few states gaining jobs despite the slow national recovery. when you look at the movement and progress, you see tremendous growth in louisiana. when it comes to taxes, we actually have proposed tax reform that will protect our low middle income families, allow our economies to grow more quickly. what you're saying, those states without an income tax actually do better in terms of income growth. if you want to encourage income growth, stop taxing it, discouraging it. i think we'll actually see higher income, economic growth as a result of getting rid of the income tax.

>> it helps to have oil and gas which we don't have at home. it's always about what kind of community, commonwealth, state or country. we believe at a time when the whole world economy is involved in knowledge explosion we have to invest there. i'm proud of what we've done number one in student achievement. it's true we are 1% higher in unemployment one growing opportunity we have a stake in. we've got a winning strategy. >> before you first grow i want

to pin you down on politics. to all of us who cover these matters it appears you're positioning yourself for a presidential run. one level of criticism has come from the plumb line blog in the "washington post" that sites your support for sales tax, expansion. bobby jindal's rise is all cosmetic. the republican reform will remain cosmetic, the gop will have impressive diswersity on the candidate level and the same commitment to right-wing policies that has occurred in the last four years. is that unfair in your judgment. >> couple of things. no one in the republican party should be thinking about running for president. we have to win a debate before we win elections. you look at the policy, call them right wing, i think they are good for louisiana, good for america. every child should get a great education. good teachers in every classroom. if that's right wing absolutely.

get rid of loopholes, tax code. it should be simpler, easier so the government is not supporting. third, look, government cannot be the answer to problems. this government has pursued philosophies, grown to historic levels. this year projecting six years in a row of unemployment above 7.5%. we tried this path. it doesn't work. we're offering the republican party a different solution, which is about growth, not austerity, not the party of big government, big wall street, big banks. i think that's the way we win the argument, win elections. >> jon huntsman says it's truly conservative to allow gays and lesbians to marry. that is a change you can support? >> look, i believe in the traditional definition of marriage. last election dominated by economic issues, unemployment higher than when the president started right after the election came out. the majority of the american people said we think the

government is doing too much. we didn't show a vision how the entire economy can grow how people can join the middle class. we're an aspirational policy and we need -- >> governor, he sounds like he's running, doesn't he? >> sounds like it to me. >> you're going to deny it on the air. >> let's win the debate, then the election. >> the debate will continue. governor jindal, patrick, always happy to have you. >> we have more here, a lot more, back and forth about who is to blame in this budget mess we're in. political roundtable with the politics behind finger point, "wall street journal" columnist peggy noonan, former democratic congressman harold ford. plus, what do cuts mean for the economy. bottom line cnbc dynamic duo here as well, jim cramer, and maria bartiromo. coming up, political roundtable. we know why we're here. ♪ to connect our forces to what they need,

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we have our political roundtable for insights and analysis. joining me peggy noonan, affair monksed. harold ford, jr., host of morning edition steve inskeep. anchor of cnbc's closing bell and on the money maria bart rom and mad money jim cramer. you heard bobby jindal say, stop sending cabinet secretaries out to scare people. here was the headline in the national journal from ron fournier. he writes, you may be right but this is crazy. as the nation's chief executive obama is ultimately accountable for the budget fiasco even if he's right on the merits and politics, yet the president is out in his radio address saying, no, the blame is with the republicans is what he says. >> unfortunately it appears republicans in congress decided instead of compromises, instead

of asking anything of the wealthiest americans, they would rather let cuts fall squarely on the middle class. >> back and forth, this is blame game in washington, peggy. >> it is. i'm not sure long-term this does anybody any good, this crisis. i think the president really has failed. i'm sure harold will disagree with me but he has failed to establish himself as a leader in this particular crisis, in the sequester thing. i just have a bad feeling about going out and trying to scare the american people right in the middle of the great recession when everybody is nervous enough. i don't think it's a good thing. i think the way he's talking about republicans, such as to al sharpton this week saying all they believe in essentially is protecting tax cuts for the rich, that's not a language that will get anybody into a discussion or at a bargain

table. >> maria, it did get american people into a discussion. the white house said, look, he campaigned on this theory of the case, on fiscal matters, economy generally. it would be an abdication of leadership if he said, no, we're done on revenues. we prevented the tax cuts from going up or taxes from going up in december. we're not doing anymore. >> i think at this moment in time as we live from cliff to cliff, we do need leadership in terms of bringing the two sides together. i think that's what the public wants. from economic standpoint $85 billion is not much for impacts. i think wall street is seeing this as scare tactics. if the market really believed the economy was going to be paralyzed on march 21st, we would not be trading near record highs. that's exactly where we are right now. nobody likes a sequester. to me it's more of a national security issue. they are so blunt, cuts in defense, as well as discretion,

nobody knows what missions are going to be impacted. from that standpoint, there is something to be said about security. from economic standpoint, wall street has been anticipating this, it's not a shocker, will not have impacts in terms of broad economic growth. >> the economy will be okay, long-term cateindicatcateindici. if you're making a 7%, 8% cut in the pentagon, the first thing you must do is pull back an aircraft carrier from the persian gulf. really, it's the first thing? with that said, when you begin looking at the numbers and the difficulty of cutting, you realize you can't furlough uniformed military personnel. you're going to end up furloughing civilians. you can't make certain cuts so they become more drastic. in this situation they could

have made more long-term. they have multiple deadlines, as we all know. what people in congress are talking about, how to combine them. how do you combine the sequester with the budget battle coming up, with the debt ceiling fight that's going to come back again. how do you add those together so you come up with a larger deal. >> the washington dimension is striking, too. now you have bob woodward of the "washington post" taking on the white house saying the president is moving the goalpost by insisting on tax revenues being in there. let me read a portion of what's in his opinion piece this morning. the final deal reached between vice president biden and senate minority leader mitch mcconnell in 2011 included an agreement that there would be no tax increases in the sequester in exchange for what the president was insisting on, an agreement that the nation's debt ceiling would be increased for 18 months, so obama would not have to go through another such negotiation in 2012 when he was run for re-election. when the president asked a

substitute for sequester include not just spending cuts but also new revenue, he is moving the goalpost. his call for a balanced approach is reasonable and he makes a strong case that those in the top income brackets could and should pay more. but that is not the deal he made. just to point this out, the white house is adamant that that is not accurate. they have always pushed for additional revenues to be part of any deal on avoiding these spending cuts. what does all this say to you. >> i'll let bob woodward in the white house litigate who is right on that matter. disagreement abounds i would agree with peggy more than she suspects. business community, working people, pedestrians can't survive and live and flourish if we operate our government at the federal level month by month, three quarter by quarter round clips. reality 9.4% in automatic cuts if this sequester goes through, 8.25 to discretionary spending. i've heard the president and my

friends in congress and manages say they wish they had a scalpel to move things around but they don't. the thing that's the most important to me, and i heard maria's interviews about how to balance this thing, there's no talk about growth to the extent we should talk about it. why not the keystone pipeline, new revenues the states in this country would benefit. ten to 12, water, sewer, education with new tax revenue. why not go forward with natural gas to be exported. the department of energy said it's okay. we would reduce our trade deficit, create jobs in the country. why not give broadband certainty around regulations or lack of regulations, $1.5 trillion in new revenues in the last years. i wish we talked more about that. peggy, i would agree with you more than you think about the disappoint. come back to the original point. no one, democrat or republican, can be pleased with the way

their parties are performing. extreme partisans. those that want government to work, believe it can work, was there when it did -- >> here is the thing jim cramer, the white house will not say this is not a pox on both their houses. this is a president that made real suggestion and republicans will not provide any more tax increases period. they can't get it passed. they are adamant about that even though the president campaigned on it. they have only rescinded 18% of the bush tax cuts. there is more room to go. what am i missing here? >> i don't think you're missing much. i do think the stock market itself is saying this isn't going to happen. the defense index on wednesday, all-time high. that saequestration will not happen. federal tax holiday won't go away, that hits the consumer. maybe something is not drastic. nothing drastic will come of this. even despite the scare tactics,

government by freakout. how right is that. i still feel pretty good. >> coming back here, peggy, to medicare reform. that's a big issue. the president has got make medicare cuts, reforms, he doesn't want to raise retirement age. perhaps he sided with cpi, reduced benefits. that's what republicans want of i think the feeling is in the white house, why are we going to give on this now? if we give on this we're not going to get tax reform, anything. >> the white house should be thinking big. in a funny way we're doing all this small scare stuff, lose faa guys, look, everybody knows a rough path to stability is this. you try to get hands around and control growth in entitlement spending. you take a look at our tax code, which is kind of an incoherent pigsty that goes thousands of pages. you make it more rational. you make it something that is

understandable to people and more allowing of growth. that will help create an air of stability that will actually allow growth to begin. so i don't think this is really all very mysterious. and i feel like the white house and the hill are caught in this stupid, childish thing. >> steve, you want to get in. go ahead. >> the white house will argue they are trying to think big and keep going for a grand bargain and not getting there. i think it's interesting that republicans, particularly house republicans, when i talk to some leading members of that party, are willing to bring in greater revenues. but they want to do it in a way that they don't have to call it a tax cut. they are willing -- >> tax hike. >> or tax hike. thank you. they are willing to bring in -- >> who cares. it doesn't matter if they call it uncle harry. >> that is the point. >> make it real reform and make it broad. don't let the white house -- >> one of the challenges the president and republicans, why is anyone talking about what the president talked about before capping reductions 20% for

charitable morning. i'm most frustrated there's not specifications on the table. steny hoyer said we could agree with all these things. problem is you have to have the vessel, leadership people to rally around. that's what i find most frustrating. >> private conversations, too. >> two guys, great guys, each made $137 million we just discovered this year. now, they paid a much lower capital gains rate on a lot of that. everybody who is watching the show, except for hedge fund managers, i was a hedge fund manager, pays ordinary income, much, much higher. this the only tax. i think we should have no more taxes. we just did a huge amount of taxes. this one is going to raise a lot more money than they realize. a lot of people -- >> fairness. >> change the revenue, change their income to capital gains versus ordinary income and pay much lower tax. one thing i don't think we're

talking about very much is the fact that the interest payments on the debt are going to skyrocketo become normalized once again. the former hedge fund manager who a came on the show who you referred to moments ago talking about the fact rates right now are making everything look totally manipulated because they are such low rates. once rates normalize, we're talking $500 billion in interest payments for the united states to actually finance the debt. that's going to make $85 billion look like a drop in the hat. >> when the rates go back up we have $500 billion -- >> it's about the bond market. the bond market is a funny thing. so far the markets have not been reacting to any of this. >> bd markets haven't been reacting. >> at some point, the bond market is a funny thing, interest rates skyrocket. >> hasn't this warning been out there -- >> bernanke is out there saying we're going to keep rates low a long time. as soon as people figure out we

have a credit problem, rates goes higher and interest is higher. >> talked to aol about america's place in the world. it does factor in in terms of what america is actually capable of doing and around the prospect of meaningful debt reduction, which i don't really see happening this year. >> you're right. >> here is steve case. >> it's not helpful to the economy. it's not helpful in terms of building confidence. not just about business in this country but people all around the world, global marketplace, investment. people puzzled the united states is not able to deal with some of these issues. there's some near term challenges that need to be dealt with. but the broader issue is trying to figure out some process so the work of the nation gets done in a more responsible, disciplined kind of way. >> so steve, i mean, part of the politics on this for the president, chief executive, make that case to the american people. if only congress can do its job,

we come to some sort of deal. boehner doesn't want to negotiate to the white house. >> boehner doesn't want to appear to negotiate with the white house. i'm going to keep in my mind separate how they substantive politics. talk about a grand bargain. they still talk in terms of combining some of these major deadlines together when i talk with members of congress and with people on their staffs. but the political challenge is tremendous for both sides. the president feels he's in a strong position. house republicans feel they are being backed into a corner again and again. they, i think, are willing to put more revenues on the table but only at the right time it does not massively damage them. >> that's interesting, the white house ultimately comes around to doing something on medicare if they think the conditions are right enough to make it part of a big deal and whether they have gotten some other things before hand. the other piece of this i picked up talking to folks this week, do they try to get something on gun control?

do they try to get immigration passed? do they try to make people feel better about washington. we'll pick this up on the other side of the break. it is oscar sunday. we're used to stock picks. also a new formula on who is going to win best picture. you don't have to watch. the oscars, that is. you don't have to watch. the olook, every day we're using more and more energy. the world needs more energy. where's it going to come from? ♪ that's why right here, in australia, chevron is building one of the biggest natural gas projects in the world. enough power for a city the size of singapore for 50 years. what's it going to do to the planet? natural gas is the cleanest conventional fuel there is. we've got to be smart about this. it's a smart way to go. ♪

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>> i love that. >> that was jimmy fallon and that was the first lady. we can talk about fiscal austerity or the evolution of the mom dance of that's what they were doing there. call me the different reel in, try to pass to my kids. that's what they were doing.

that was fun. wasn't to talk politics for a second if you can regain your composu composure. you heard bobby jindal, clearly positioning himself to run. hillary clinton is still sort of the perp to beat on the democratic side. head to head with governor christie, you look at 49 to 45. how do you see these early readings so far? >> they are fun to talk about. hillary clinton makes it easier i think for republicans for this reason. it makes it harder for unserious candidates to emerge. >> just among new jersey voters that poll. >> you hear the voices of jindal, christie, mack donnell, jeb bush as opposed to voices of santorum, palin, others. i don't mean to leave anybody, paul ryan, marco rubio as well. bobby sounds like he's running. i serve with him in congress, like him, respect him, don't agree with him on certain things. his voice is a serious one to consider as opposed to voices on

the fringes. >> what do you see, pegj? >> i see an opening down the road that does the opposite of what washington does now. washington is a suffering marathon. which suffering do you want the most, cuts, tax increases, faa flight controllers leave, all about suffering. someone coming forward and saying, no, actually, it's all about growth. we can get dynamism, not only through what harold mentioned. this energy revolution we're on the brink of and not grasping and making real could help turn the entire economy around. it's so amazing good stuff can happen and we're sunk in this suffering. >> we're going down a road of substance here which i want to pull us back here. i want to make sure we spend a couple minutes on the oscars. before i do, the other big picture of the day, the pope's final mass -- not mass but prayers he's offering today for the final time at the vatican.

incredible pictures this morning as you look at the crowd. peggy, you're also following this, as we get closer to concave, lingering squanl over sexual abuse, which is part of the conversation as well. what do you see right now? >> this is so interesting to me. we have never in 6 or 800 years had a moment like this. people keep saying to me, what do you think the conclave will do. what will the college of cardinals do? i say not only do i not know, of course, but they don't know. we're in some new territory here with the papacy. they have had more time to think about what they want and without an overlay of mourning for the last guy, if you will, to help direct their thoughts. on the scandals, i sure hope that cardinal mahoney of los angeles, roger mahoney, who has been involved in this very recently documented horrible,

horrible long-term scandal while he was cardinal in los angeles, i think it would be wonderful to see a cardinal to show humility and modesty and self-sacrifice and not go and bring the overlay of that scandal with him. >> let us switch gears and talk about what a lot of people will be focusing on tonight, the oscars. best picture nominees. only in "meet the press" style could we look at a way to inject politics into this. nate silver in "new york times," his blog, coming up with a way to predict the outcome tonight. here is what he writes. zero dark thirty may have won critical acclaim but critics adopt for for oscars, insiders do. there has been an absolute consensus for "argo," among insiders. it would be enormous upset to lose. "lincoln" once considered front-runner nominated almost every time but won none. counting on a comeback would be

like ruddy giuliani resurrecting his campaign after finishing every else first. >> let's not forget "les mis." i think "lincoln" had great acclaim. "argo" probably has great teeth and already winning so many awards. i don't know. i didn't see "argo" but -- >> i saw "argo" last night. it's really good. the model is the insiders that matter don't pay attention to what critics think. it's insiders picks. >> nate silver is a smart guy. you're always biased in favor of the movie you like better. i like "lincoln" better. "argo" bothered by the end. >> this is a big issue because it didn't happen. that didn't happen. >> it didn't happen, just seems overdramatized. now i'm becoming a theater critic. "lincoln" whether it wins the

academy award or not, the movie that ended up resonating more in this moment in time, this moment in history. it's perhaps the more significant movie for that reason, even though "argo" -- >> if you've got historical drama and gaps in what's true and what's not. so many americans are getting a sense of this history through the drama, through "zero dark thirty" and lincoln and "argo." >> "silver linings playbook" did beat the cowboys. everybody from philadelphia, my father and i have had the exact relationship cooper had. "lincoln" wins for exactly what we're talking about. >> you think "lincoln." >> what i want is silver linings. "lincoln" gets it because they say i hate washington, let's vote for original washington, a republican that managed to get everybody together. >> harold, any surprises here. you pointed out nate silver didn't get super bowl. >> nate is smart. i trust him. i think he's right about "argo."

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